Although the bill's primary function it to prevent the growing number of mortgage fraud cases, it also the most significant changes to the federal False Claims Act since 1986, according to the bill's co-sponsor Senator Chuck Grassley (R-IA). The changes to the False Claims Act can affect any organization that submits claims to the government for payment, including healthcare providers.

Specifically, the bill would extend the reach of the False Claims Act to include any false or fraudulent claim for government money or property, regardless of whether:

The claim is presented to a government official or employee

The U.S. Government has physical custody of the money

The defendant specifically intended to defraud the U.S. government

"If the bill becomes law, it is easier for the government and private whistleblowers to succeed in false claims act cases," said Claire Turcotte, a healthcare attorney with Bricker & Ecker LLP in West Chester, OH.

Not that False Claims cases have been particularly unsuccessful. In a press release, the bill's co-author, Senator Patrick Leahy (D-VT), called the False Claims Act the "one of the best civil tools available to root out fraud in government." Leahy also said from 2000-2008 the Justice Department recovered more than $15 billion in fraud using the False Claims Act.

According to Leahy, the bill redefines terms in the False Claims Act to more accurately reflect the intention of the law. In particular, the term "knowingly" has been redefined.

The new language specifically states intent is not a requirement of the False Claims Act and the prosecution only needs to show the violator did one of the following, in regards to information:

Had actual knowledge of the information

Acted in deliberate ignorance of the truth or falsity of the information

Acted in reckless disregard of the truth or falsity of the information.

Tim McCormack of Phillips & Cohen LLP said critics of FERA claim the change in language will unfairly expand the scope of the False Claims Act to cover innocent mistakes, but McCormack doesn't see it that way.

"The confusion on this point likely comes from the way that ‘knowing' is commonly defined in legal proceedings. A person can ‘know' that something is false in several ways. Obviously, a person who is actually aware that a claim is not true, ‘knows' that it is false. In addition, in legal terms, a person may ‘know' a claim is false if they suspect or should suspect it is not true and do nothing to confirm whether it is," McCormack said.

Basically what the bill does is protect the government from organizations that look the other way when they suspect a claim to be false in order to get out of any liability. The logic being if they do not investigate suspicious claims, they can always say they never knew about it.

The new language in FERA will put the onus on organizations to sniff out suspicious claims submitted to the government and investigate them. If irregular claims are not checked by organizations, they will be prosecuted as if they had intentionally submitted false claims.

One way to ensure an organization is protected against prosecution under the False Claims Act is to ensure it has a reliable compliance program, McCormack said. "The best way to steer clear of False Claims Act liability is to strive to submit truthful claims; scrupulously and promptly correct those inadvertently false claims that you later discover; and, listen when your employees raise compliance concerns."